FSA ban 'won't solve credit crunch'

Published: 06 October 2008
The recent ban on short-selling by the Financial Services Authority (FSA) is not something that will solve the causes of the credit crunch at the moment, according to one sector commentator.
In news that may be of interested to investors looking for unsecured loans, the FSA last month put in place a veto on the short-selling of stocks within UK financial institutions and requested daily disclosure of all net short positions in excess of 0.25 per cent of the ordinary share capital of the relevant companies.
Charles Davis, senior economist at Centre for Economic and Business Research, said the move was an attempt to "quell" some of the recent economic instability.
"It is essentially clamping down on speculators ... there has been a feeling that they have just been driving down prices and adding to the sense of general panic," he explained.
Those on the search for unsecured loans may also be interested to hear that Mr Davis added that a solution might be imposing measures to prevent stock prices falling further than they may have done.
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